Skip to main content

tv   Worldwide Exchange  CNBC  August 27, 2012 4:00am-6:00am EDT

4:00 am
apple patents. nokia and microsoft set to benefit from that samsung case. u.s. gold coast is bracing for tropical storm isaac which can be a major hurricane. energy prices moving higher as oil and gas companies move to shut down production. so, we're waiting for this crucial german indicator, the german august, current condition numbers coming in at 111.2. the main number there, 102.3. the forecast was for 102.7. let's get out the patricia and get a bit more information on what's going on here. looks like it's fallen short.
4:01 am
>> reporter: it is. absolutely. we have an indication of 102.3 for the index for august. that's lower than the forecast. interesting twist though to this stock because we have current conditions at 111.2 which is ahead of expectations on the other expectation index. what people expect over the next six months to happen is below expectations coming in at 94.2. we had hear expectation of 95 to be reached. this is something that should have an impact also on the euro. at the moment euro/dollar at 125.14, not moving. at the moment the index below expectations, however it is the expectation index that's definitely below par. on the other hand current conditions stabilizing. a couple of issues that people are watching. first of all current economic crisis, debt crisis in euro but if you think of the way the euro
4:02 am
has started trading on the upside to the u.s. dollar as of late, let me give you a comparison. on the 3rd of august, we had about 1.2179, trading above 1.25. euro german export driven nation had a little bit of pressure coming there too as well as the oil price, also continuing to rise. brent 174.75, at the beginning of the month we were trading at 104. a couple of numbers also. expectations slightly negative for the first time in three years. as i said what's really important, decky is to still see domestic demand is not yet picking up from the export driven economy that germany is set to say. >> patricia, stick around, we have a guest who joins us to give us a bit more analyst on
4:03 am
these numbers. what do you make of these numts. it's a bit of a concern we have that export figure looking a little weaker than we expected. >> well, you know, that's what we can expect because when we look at the entire world, the global economy, when you look at china, the u.s., other countries in europe, you see that the economic situation is weakening. so it's not a real surprise. we saw that with the pmi market survey last week, we saw that the new export where 38, 39 is the lowest number since march 2009. so it's a very weak situation and it will have a very -- so it's important to see that. in fact, when you look at the
4:04 am
ifo number it's consistent with what we saw on the view survey previously, previous demands, although the pmi market survey we saw last week. so we're in a situation where the german economy is weaker than expected and it's bad news for european economy. >> absolutely. of course it's a forward looking index. i wonder the entire talk, what does it matter to the german businesses that is an issue on the "daily news" agenda? >> the greek situation for germany and for everyone in europe is uncertainties. because we don't know exactly what will happen. every day, every week we have new data, everyone wants greece
4:05 am
to be inside euro, to be kept inside euro. at the same time everyone say well, you have new constraint, new constraints on europe, on the greek economy. so we don't know exactly what will happen. in that case it leads to larger uncertainty, not only for greek people but also for europe because we can't imagine that greek, that the greek economy could improve with such constraints, and we're waiting for the troika report at the end of this month and probably the recommendation will be tougher saving for the greek economy and in that case it could lead to greek uncertainty and we don't know what will happen in the euro area for the coming months, and it's something that is problematic for companies.
4:06 am
>> let's leave it there and move the conversation on. patricia thank you for updating us with those ifo figures. philip will stay with us for a little bit longer. further details then on the ecb plans have been skectched out. "wall street journal" suggest they want to guide investors to target yields for government bond in high risk countries such as spain now setting specific limits. a spokesperson for the ecb has refused to comment on speculation that there has been plenty of speculation. philip come back to this issue. you alluded to this in the conversation we just had. so much uncertainty particularly around the details on any bond bank program from the ebc. a great deal of wrangling between various are officials how far the ecb should go. what do you think is the most likely outcome? >> well, that's a very important
4:07 am
issue and maybe we will have news, you know, of mario draghi's speaking at the jackson home symposium this week and maybe on september 6th we'll have probably the framework that will be used by the ecb. the point is that if there is an explicit target, probably the ecb will have to pay a lot to buy a lot of assets, so it's not credible on the strategy and even more if we have this strategy it means that the ecb will use last resort in europe and pose a problem with other governments because it would change the global institution in europe. and so it probably is the best way, best strategy for the ecb is to have implicit targets, the ecb will not reveal to
4:08 am
investors, but they will manage the situation to avoid some spikes in interest rates and in spain and in that case they could succeed, but it's a complicated story, they have to convince investors and they have to be with governments not against governments in the institution, so very tough for the ecb in the coming months. >> philip, thank you very much for coming. so let's talk about samsung. the damage to samsung electronics is obvious. shares suffered their worst single day drop in about four years after a u.s. court on friday delivered apple a decisive win on its patent
4:09 am
infringement battle. follow me @beckymeehan. was it fair that the outcome of this particular battle, i'm sure plenty more to come. we'll get your comments later in the show. first of all, let's head out to seoul for more detail. interesting to hear what our viewers have to say about this. sketch out the details for us first. >> reporter: becky, the national bellwether was a 17% weighting on the overall index closed lower by 7.5%. $12 billion off the tech giant's market value. on friday a u.s. federal court jury ruled that samsung infringed six out of seven of apple's technology and design patents. the court slapped samsung with a a $1.05 million.
4:10 am
there's a an injunction on the galaxy series. galaxy being pulled out of the market, how big a blow could this be? the latest stats from strategy a na li ticks says north america makes up 16% of the whole global smartphone arena and nearly 30% of samsung's asset revenues. samsung said it will appeal. if it loses again in september it will take the matter to a higher court which will even further draw out this long and protracted patent battle. the next ruling will come from japan. the silver lining for many korean investors today though was that main kospi index closed lower only about 0.1% as apple rose. also moody's upgrade of the country's sovereign debt rating to aa from as the 1.
4:11 am
back to you. thank you very much for that. so we will continue to focus on this story throughout the show. we'll speak to an award-winning intellectual property activist with 25 years of software experience. that's coming up in about 15 minutes time. so the markets report. no ftse because there's a holiday in this country. so some of us are still working but no market action. let's look at the other markets. dax is trading lower by three or four points today. the cac is down nine points. a tiny move to the down side for the spanish market. and the swiss market just up a couple of points. fairly muted moves for the equity markets overall. let's look at the for recognizes market. euro/dollar reacting to the data.
4:12 am
patricia and philip, euro/dollar is at 1.25. a little bit of a spike upwards after the ifo data. dollar/yen is at 78.67. there are shifting higher. us ay dollar is dipping against the u.s. dollar by one point or so and sterling is 1.5822. let's look what's going on in the bond markets as well. we're paying a lot of attention to the short end of the european debt, particularly the italian and the span zwrish debt. we'll talk about that more later on. the bund, the ten year germany at 135. we have seen, of course, very low yields for these safe-haven or perceived safe-haven debt markets and high yield persisting in europe. we've seen yield coming back below 7% but the two year, the shorter end we have seen the biggest moves on speculation where the ecb could concentrate its bond buying.
4:13 am
the ten year italy at 5.695 and in the u.s. again, again very low yield 1.678. let's look at what's is going on in the commodities as well. where we have seen big moves in the oil markets. oil market is very much supported by concerns about the tropical storm isaac. also concerns too about supply concerns and also about central bank action too and how much upside we'll get from any further central bank action particularly from the fed and ecb. so brent up by over 1%. 114.83. also the central bank action spot gold as well. we're at $1,674. these prices are up about 1,676 earlier on this session about speculation about more central
4:14 am
bank action and be gained last week. platinum had been supported last week on concerns about ongoing tensions in south african mines after we had scores of people killed at that lonmin mine in the past few days. dipping a little bit by a quarter of a percent. soy bens up 1.3%. concern about weather conditions particularly in north america, managed to support the grain complex in general but seeing contracts higher particularly in soy. now, let's just check the markets across asia as well. declines for much of the region. gains coming through the s.e. t.. samsung stodominating the asian trading day. let's go to singapore for more. >> asian bourses mostly close in the red. investment risk appetite is
4:15 am
waning ahead of key economic data. the shanghai composite was the epicenter. it dropped on week corporate earnings. the top official reiterated their stance on policy support but the actions still haven't been delivered yet. brokerages and insurers took the brunt of selling. hang sang dropped lower. china blue chips bore tlagers. industrial and material companies led the losses. the nikkei was the one bright spot, gained 0.2% ahead of key domestic data later this week. olympus shares gained. south korea most sectors were trading to the upside but the benchmark kospi was weighted down by 7.5% plunge by index
4:16 am
heavyweight samsung electronics. the market ended lower. but iron ore producers agreed to a take over from china. indian sensex shedding a quarter of a percent. >> still to come on today's show, talks on the debt crisis continues as prime ministers in france and germany continue to meet. we'll steak to president of hotels.com about consumer demand. >> tiffany due to report second quarter numbers. we'll get a preview. plus hurricane warnings are in effect as tropical storm isaac moves closer to landfall. we'll get out to the gulf coast. all that and plenty more. do stay with us. [ male announcer ] whether it's kevin's smartphone...
4:17 am
mom's smartphone... dad's tablet... or lauren's smartphone... at&t has a plan built to help make families' lives easier. introducing at&t mobile share. one plan lets you share data on up to 10 devices with unlimited talk and text. add a tablet for only $10 per month. the more data you share, the more you save. at&t. trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc
4:18 am
and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn. ♪ i can do anything ♪ i can do anything today ♪ i can go anywhere ♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread that doesn't taste gluten free. together, the elements of science and the human element can solve anything. solutionism. the new optimism.
4:19 am
tropical storm isaac has brushed past the florida keys into the earn part of the gulf of mexico. it's expected to strengthen to possible category 2 storm with sustained winds of more than 100 miles per hour before making
4:20 am
landfall on wednesday somewhere between mississippi and louisiana. hurricane watches are in effect from new orleans to the florida panhandle. potential exposure to property damage along the gulf coast estimated up $36 billion. oil and gas producers shutting down gulf operations. isaac with temporarily shut 85% of u.s. offshore oil production. 68% of natural gas out put and 40% of refining capacity. nymex natural gas trading higher. crude up higher. natural gas is trading up by 1.6%. >> fires in venezuela, firefighters are trying to put out a blaze after an explosion on saturday. 41 people killed. dozens more hurt. more than 200 homes were damaged. the refinery in western
4:21 am
venezuela handles 645,000 barrels a day. it had already been partially shut down twice this year because of a small fire of a cooling unit. the iaea may tap into emergency oil reserves by september according to industry general petroleum citing unnamed source. the move is a u turn to the iaea's chief of dismissal of any action a week earlier. it's thought any potential move could be at least as last year's 60 billion barrel injection. >> 72% fall in profit in the second quarter on increased costs on aluminum. it cut its global outlook for consumption and expect chinese demand for the metal to slip. >> qatar holding is ready to increase its stake in uk mining to 25% if the greeks plan to
4:22 am
merge with glencore falls through. sources close to the bid told the paper it said the chief executive would have the backing. the stake increase would mean qatar holding could veto any future merger. samsung not the only tech company getting punished today for friday's u.s. court rulings on patent. analysts say apple's victory is a big negative for other android phone makers. taiwan's htc shares dropped on 2% on concerns it may need to settle its own patent lawsuits. for more on the short fallout on this big apple/samsung ruling we're joined by florian mueller. florian, is this deal fair? is it likely that samsung will
4:23 am
be able to overturn the decision? >> i think that the most samsung can realistically hope for is some adjustment. i believe that the judge is going to be differential to the jury and the appeals court as well. however, the jury has to answer more than 700 questions, and i would also be surprised if the appeals court and now the judge agreed with the jury on 100% of those findings. some changes, yes, but a dramatic reversal of fortune probably not. >> is this bad for the consumer then? it does seem to just back up apple's dominance in this sector, giving them free rein to continue that dominance for some time to come nine agree there's a need for competition and nobody wants to have a monopolized market here. the good news for consumers is that a, this particular ruling, even though it's a huge break
4:24 am
through for. all is not immediately devastating to samsung. they will be able to keep selling products in the united states and b, more mid-term to long term, companies like samsung and h pc and lg are multiplatform companies and even though google's android mobile operating system faces a number of intellectual property issues and actually including friday's verdict androids based devices have been found to infringe already 15 different apple and microsoft patents and counting. but the bottom line is there other platforms, windows phones and other initiatives and opportunities for companies like samsung in that regard. >> florian, are we coming to a stage where the, just the nuts and bolts of intellectual property law will have to be reformed to keep up with the kind of intellectual property that the law is called upon to
4:25 am
adjudicate. in terms of what kind of items can be patented and how these things are carried out. it seems like big companies are just bogged down in these kinds of issues at the moment. >> i understand widespread concern. at the same time we have to one it's a very unique situation in which these current patent disputes are being fought. there's a whole new kind of -- a whole reshuffling of market share. you have companies with different background. apple a computer company, mobile players like nokia, or electronics companies like samsung trying to capture a piece of this huge market and it causes a huge friction. there's room for improvement in many ways. i personally campaigned against softer patents in europe years ago which is why i can certainly relate to a lot of criticism.
4:26 am
in my opinion the most pressing issue right now is not even what apple is doing. as spectacular it may be, my primary concern for consumers and for innovation is what some companies do with so-called standard, essential patent, meaning patents without a phone is not a phone without which a phone cannot dial into a network, that i think is the first issue to address worldwide and even regulators like the european commission are top this. >> just looking to some of the viewer feedback that we've had on this story on twitter, analysts watching, florian, joe one of our viewers says he can see about protecting patent technology but said the courts played a role in this verdict. is there an argument that the u.s. court is a bit too cozy with apple and samsung and have
4:27 am
an unfair brunt? >> i definitely want to defend the judge who is by coincident a korean judge. i think she did the best job she possibly good to give samsung a fair trial. samsung was out of luck in the sense that the jury foreman personally holds a software patent and electronically believes in the protection and enforment of intellectual property. i think this philosophical inclination played a bigger role. samsung struck its biggest victory in korea. if i compared this to rulings in various european countries, they are are in the middle. >> thanks for that. also thanks to joe who wrote in from ohio on twitter with that
4:28 am
question as well. so still to come on the show, fresh from talks with greece's leadership, french president francois hollande heads to madrid to meet with the spanish prime minister. we'll preview that summit. that's coming up.
4:29 am
4:30 am
4:31 am
welcome back. germany's key business sentiment index falls more than expected to reach its lowest level since march of 2010 despite some signs of hope for manufacturing. samsung electronic sharesing rocked by friday's u.s. court ruling shedding $12 billion off its market cap after the tech giant is found guilty of infringing six of seven apple patents. nokia tops the stoxx 600. the phone maker and microsoft set to benefit from the samsung case. the u.s. gulf coast is bracing for tropical storm isaac which can be a major hurricane when it makes landfall by mid-week. energy prices moving higher as oil and gas prices move to shut down production. so let's look around the european markets. the uk markets closed today for this holiday. very small gains for the german market. also switzerland declines for the cac and the iran bex. cac down marginally, ibex by
4:32 am
0.4%. bond markets, a lot of speculation around the ebc and what they will do to get a bit of respite for the spanish and italian bond markets. 6.4% is the yield on the 10 year in spain. 5.7% roughly on the ten year in italy compared to very low yields we're looking at the ten year in germany which is 1.35% right now. in the forex markets, reaction to those ifo numbers. 1.2525. hanging on to the gains. euro sterling is at .7925. aussie/dollar is dipping between 1.1 and 1.1%. just 1.0394. further details on the ecb's plan to cap peripheral bond yields have been sketched out. the latest rumors suggest
4:33 am
officials from the central bank want to set a target range on bond yields. angela merkel has asked for everyone to weigh their words carefully. after potentially inflammatory comments from germany's top policymakers over the weekend. in an interview, ecb bond buying covey late rules. today german finance minister meets his french counterparts in berlin. let's get out to patricia in tranquilize further. it looks like this war of words, even within germany just continuing over the weekend. >> reporter: especially within germany and, becky, to be honest with you it may heat up going forward which can be dangerous for the eurozone because remember in a about a year's time we do have elections coming through here in germany so the
4:34 am
making greece and to the possibility of greece leaving the eurozone an issue for an election next year is definitely very dangerous indeed. interesting to see, of course, that meeting between them today ahead of jackson hole on friday. one thing to come out, we know where both are standing because france has been adamant about saying we need greece to stay in the why are you something that was expressed by germany that they would like greece still to stay in the eurozone. germans are adamant about greece sticking to what they said about reforms and timing over reforms. just this weekend, he was against giving greece more time to put reforms into place. he equates more time to more money and once more money is on the table perhaps the actual set up conditions for the bailout money may be changed as well. that was echoed by our
4:35 am
economists who also said he would definitely not like to see, it is not desirable to see greece exiting the eurozone, however, again, he puts a lot of emphasis on fulfilling for what they said for the bailout money within the time frame given. angela merkel said she's trying to calm the waters right now because you know how it is, especially within the markets, policy is something that drive the markets, the humans behind the numbers is what the market is part of psychology, very much reacting to the sentiment that is basically given by the politicians discussing backwards and forward. by the way also, becky, angela merkel getting a little bit more support when it comes to the ecb bond buying next steps going forward. >> thanks for updating us. french president, francois
4:36 am
hollande says greece must remain in the eurozone. the country's leaders need to prove they are willing to go through with reforms. today his focus will turn on other troubled hot spots. spain is due to meet with his counter part. stephane pedrazzi is watching these developments. >> reporter: spain is speaking with the same voice on angela merkel. trying to ease speculation on greece. francois hollande says greece must remain part of the eurozone, however he's asking the greek leaders to show more commitment basically. he would like greece to demonstrate that the recovery program is credible and asking the leaders to have the political will to go through with plan which means basically deep restructuring and austerity, so that's important the greek statement from francois hollande which is
4:37 am
similar to angela merkel but very much different than what eve heard from some german conservative leaders in the last couple of days who suggested as patricia was explaining greek leaving was manageable. francois hollande will be heading to spain to meet spain's leader. they will talk about fwrooek leaving the eurozone even though it's not on the table. spain was in talks with other eurozone members over the terms of a potential sovereign aid. no decision would be taken until at least the 12th of depth. that would be just before the next meeting. so be interesting what francois hollande will say after the meeting because this discussion about the spanish potential or spanish sovereign end is not on the agenda. let's wait and see for the press conference.
4:38 am
back to you. >> stephane, thank you very much for that. let's see how the spanish debt yields held up. looking at what's going on particularly just in the past few weeks, this is a three month chart. so, saw a massive spike in the yields on the two year, just a few weeks ago towards the end of july when we saw the two year above 7%. this was really, obviously, some extreme sense in the eurozone. very much coming back since then but still at 3.72%. very sharply lower from those levels over 7% that we saw just a few weeks ago. let's start by getting your thoughts on the situation then with the various peripheral countries that are in trouble. greece is, particularly what we're hearing from stephane and
4:39 am
patricia what happens next for greece. does greece have to go whether or not they get a bit more time? >> yeah. i think it's just a very challenging situation for the country. if you look at the fundamentals, it's not managed to turn the case around. still have very bad with tax payments. we saw a study only 40% it would be paid. the whole problem could be solved to show how much underlying structure we have in that country. when you compare greece to ireland they did not manage to cut their labor cost. so investment case important the country becomes very difficult in particular if you compare it to countries like turkey or poland where you see much more manufacturing business go, when companies make a decision to build up their plants, the investment case for the country is still bad. going to be very hard to bring back the economy from this recesssive cycle and that's where i have serious doubts, despite all these political talks and measures greece will
4:40 am
have a very difficult time to make it. and i can understand angela merkel's point that they don't want to go down as politicians that have a big euro but if you look at the fundamentals i find it very hard they can work this out. >> so, there has to be some kind of catalyst in either direction that makes this eventually happen to the teetering on this. >> the fundamental problem we have in greece and spain is that the ability to devalue the currency is not just there any more. and that's been the obvious thing that kept these countries going before they joined turo. so having the ability to devalue, having the ability to become competitive is from my perspective the only cure they have to bring the economy back up to speed. now, understand it's a very
4:41 am
complex process to get these countries out of the eurozone but ate process that has to be addressed and i think that should be more seriously considered instead of like kicking the can down the road. i think that we'll see quite a dramatic shift after elections have gone through in germany next year and angela merkel might have made it to her next term. i think she might then be willing to take some more serious steps to watch this crisis because the acceptance level within germany for these rescue and bailout packages is very low. >> how are you trading around these issues then? >> well, you mean like where would i put my money? >> yes. where your put urge money, hopefully? maybe, where did you put my money, i guess is a better question. >> spend it. exactly. just enjoy the summer and spend it. we know that the european central bank is probably more
4:42 am
restrictive than the u.s. would be in terms of printing money but inflation concern is there and what you can say in particular about germany, a lot of people are putting money with real assets now. a lot of people are trying to buy homes, buy apartments. we almost have a little bit like a real estate boom in germany, and there's a lot of funds that pop up around this area about real assets, about real estate. that's certainly one way to go. in term of our business, to be quite honest, these new slows make it very difficult to trade the stock market or the equity markets on a systematic basis. without any fundamental change it's very difficult environment for us at the moment. that's all i can say. bonds are a little bit easier, commodities are a little bit easier to trade but current service a just a bit. >> spend it. i like that advice. i'll try to heed your advice.
4:43 am
>> enjoy it. >> thank you very much. unusual strategic advice but have to take it nonetheless. if you want to get in touch with the show e-mail us. the address is across your screen there, worldwide@cnbc.com. twitter, follow me @beckymeehan. investment advice, spend your cash. big job cuts heads japan's financial sector buzzing today. we have the story live from tokyo. >> reporter: nomura holding shares finished 1.4% lower following media reports that the firm plans to cut several hundred jobs out of its equities and investment banking divisions. some investors worry the restructuring may cause further restructuring in the company after insider trading scandal forced resignation.
4:44 am
according to media reports, nomura's over haul will help restore its overseas division. details of the plan will be revealed next month. it will account for the largest portion of the cuts. the region posted $970 million in loss in the past year amid ongoing debt crisis. nomura asian and american operations are not spared. the company will shift its resource nor promising areas such as fixed income in order to build market share and deliver more consistent results. back to you. okay, thanks very much for that. so unicreditbanca is facing sanctions over iran. it said in a statement that hvb has been cooperating with investigations with regulators
4:45 am
regarding sanctions of persons and company. the knit was conducting an internal review. meanwhile deutsche bank is said to be considering bonus rules that could strip bonus payrolls. the "financial times" says the rule has been described as unusual if not unique. a suspect has been arrested following the theft of private data relating to the clients of swiss banking firm. the swiss newspaper says the stolen data was received by tax inspectors in germany. investigating people who may have used swiss bank laws to dodge taxes. carolinain has more. >> reporter: good morning to you, becky. this is just one of many disks that have been stolen by the swiss bank employees and so many
4:46 am
others disks have been sold to german tax authority in this case. this put the swiss german tax deal at risk especially with the harsh language coming from the german side in the past couple of days. the ceo of julius baer confirmed data theft. ju lie us a baer settled with german tax authorities to end investigation last year at the cost of 50 million euros. this renewed data theft doesn't help. separately, julius baer ceo talked about the purchase of merrill lynch international growth management unit. that will involve massive cost-cutting including some job cuts. in switzerland and also possibly singapore and there was no appetite for another big
4:47 am
acquisition at least for a year or so. on that note, back to you. >> thanks very much for that. break being news four then. mexico has launched a wto, word trade organization dispute against argentina. this news is breaking in the past few minutes. the complaints surround argentina's import licensing rules at which some say are blanket restriction of import, and protectionist policy. this is the complaint that mexico had launched against argentina at wto. time to take a quick break. still to come the global economy may be false terrifying. are policymakers willing to splash cash on travel. we'll hear from the president of one of the leading travel websites. we'll be right back. [ male announcer ] whether it's kevin's smartphone... mom's smartphone... dad's tablet... or lauren's smartphone...
4:48 am
at&t has a plan built to help make families' lives easier. introducing at&t mobile share. one plan lets you share data on up to 10 devices with unlimited talk and text. add a tablet for only $10 per month. the more data you share, the more you save. at&t. ♪ ♪ i can do anything ♪ i can do anything today ♪ i can go anywhere
4:49 am
♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread that doesn't taste gluten free. together, the elements of science and the human element can solve anything. solutionism. the new optimism.
4:50 am
time for our weekly trade links special this week we're looking at travel industry. has the slow down in summer economy impacted consumer appetite for getaways. we caught up with the president of hotels.com and asked how demand has been holding up. >> travel has had a good first half the year in 2012, moderate growth for the most part. but it differs by region.
4:51 am
that's a lot to do with the macro economic conditions going on in the different regions. in north america business travel has come back. prices for hotels have risen a little bit. you're seeing better occupancy there. the dollar has gotten stronger so you're not seeing as many travellers coming from europe or brazil in particular. so it's moderate growth, cautiously optistic but not fully back to where we were a few years ago. brazil, very strong market. lots of middle class customers now picking themselves up and wanting to travel. particularly to the u.s. so good growth from that perspective. a tale of two cities north and south, pretty strong. south because of the issues with economics and austerity measures, you're seeing some of that deflation of travel in that market. middle east, you have the arab spring going on last year. we're comping over that.
4:52 am
more travel going in that direction. china more chinese customers are traveling internationally. visa restrictions have been reduced so they are traveling a lot more. you got japan who is coming off the tsunami from last year so they are more confident about traveling. lots of low cost carers. >> you mentioned china. i keep hearing also about the chinese traveller who is going to be coming in full at any point in time but still seems to me they are traveling very much to neighboring countries as opposed to europe or u.s. in these huge numbers that everybody is talking about. >> it's little bit of both. obviously it's easier for them to travel and enter apac. easier from a visa perspective. europe and north america catering to these customers because when they come they stay longer and spend more money. >> speak of money you also
4:53 am
mentioned the impact, the currency impact that we're seeing in north america. is it a big impact? are people really thinking twice about traveling due to the currency fluctuations? >> yes, absolutely. the dollar has gotten a lot stronger. we started in brazil, actually at the beginning the year. it was a $1.60 compared to the dollar. now it's up over $2 to reille. >> so, how is mobile changing your industry? >> i think mobile and tablet. you have to think about these in conjunction have really revolutionized the online travel business. think about having a personal computer in the customer's pocket, and, you know, from a mobile perspective on the searching side people using lapse time when they are commuting on a train or bus and doing searching, right and when they book a lot of that booking
4:54 am
is happening last minute for tonight only in the city they are in. so we're seeing huge amounts of increases of tonight only bookings in that last minute sector. on the tablet side, you know tablet, customers are more like pc users because it's a richer experience. but you're not tethered to a desk or desk top. you can move to your sofa or bed. much richer experience and booking experience. definitely revolutionized the business. >> there's approximately 150,000 hotels in 19,000 location under your umbrella. the average revenue per room that people are willing to spend these days, are we up or down? >> it really depends on the market, right? all the thing we talked about from an economic perspective but overall you're seeing trends that it's getting moderately better overall from around the world. so it's good news for hoteliers and seeing occupancy getting
4:55 am
better which gives them the ability to raise prices. >> that was the president of hotels.com. more on our trading serious go to tradelinks@cnbc.com. more china earnings on time with china life. all due to report their results. australia the retail of david jones and airline virgin australia slated to hand in their report cards. over in india investors will be watching out for maruti suzuki after it restarted their production. our question today apple and samsung. ralph writes in. apple/samsung is about money. both parties have forgotten about the people. they should build on each other's work. another one, the fight between apple and samsung in russian
4:56 am
proverb two fight the third one is watching. let us know your questions. get in touch with us at worldwide@cnbc.com or go to twitter, follow the show at cnbcwex.com. or to get a hold of me go to @beckymeehan. quick look at the european markets. remember no trade here in the uk today because we're closed for a holiday. elsewhere, muted trade across much of the region very small gains for the dax, up very marginally for the german trade. small declines for the cac and the smi too, the cac is down 1.1%. the smi is flat we have to say at the moment to be honest. the spanish market trading lower today. let's look ahead what we can expect at the start of the u.s. trading day. still bright and early there but the implied open at this stage, the s&p up by a couple of
4:57 am
points. dow jones up by 17 points, the nasdaq opening right now would open higher by 11 points. in europe we're looking at a pretty flat start to the equity trading week and month testily positive tart to the u.s. week is what we're expecting at this stage. we'll take a quick commercial break. still to come we'll head out the tampa where mother nature is releasing her fury. also coming up we'll get more on that issue. we'll be right back. f!
4:58 am
4:59 am
5:00 am
hello and welcome to today's edition of worldwide exchange." . i'm becky meehan. these are your headlines from around the world. . germany's key index falls more than expected. despite some signs of hope from manufacturing. >> samsung prong shares rocked by friday's u.s. court ruling. the tech giant is found guilt i of infringing six of seven apple patents. nokia tops the stoxx 600. microsoft set to also benefit from the samsung case. >> tropical storm isaac set to be a major hurricane by mid-week forcing all platforms to shut
5:01 am
down and sending energy prices higher. if you're just tuning in thanks for joining us. this is how markets are faring ahead of the u.s. open. we're looking for modest gains. the nasdaq and s&p at the start trading, modest gains come on the back of a pretty muted trading day so far for european be markets. we have no trade in the uk for starters because of a public holiday here. very slightly higher for the dax. slightly lower for the cac. ibex is trading down by half of one percent. swiss markets trading almost entirely flat at this stage. looking at what's going on in the fx market, euro dollar holding on to gains. 1.25. the ifo data earlier was one of
5:02 am
the big factors. dollar/yen, 78.69. dollar is moving slightly higher against the yen. aussie/dollar lost a bit of ground. down by a quarter of percent against the u.s. dollar to 1.0384. so bond markets on to. we showed you earlier in one of our conversations with our guest quite how much the spanish two year has come down in the past few weeks, about 7% to about 3.5% or so on expectations of ecb bond buying particularly towards the short end. looking at those benchmark ten year yield, at 1.348. very low yields. 6.4% on the spanish ten year which is well below the spikes we've had. still elevated. italy 5.7%. and versus the u.s. where we still pretty low yields, 1.678% on the u.s. ten year.
5:03 am
now commodity markets various factors are playing out not the least tropical storm isaac which we've been covering on the show for you today, supporting oil prices around the world. brent is up by 1%. more central bank action. gold is slipping slightly but still at 1.669. platinum has been supported too by strife, continued strife between labor unions and police in south africa. that lonmin plant scores of people were killed. platinum was down by half a percent. also in the commodity space, soft soybean up by 1.1%, right across the grain complex seeing
5:04 am
record highs because of adverse weather conditions in the u.s., particularly parts of russia as well. now soybeans reaching fresh contract highs today, that seems to be supported at these levels. quick check on the commodity markets. let's look at the global markets today with a check on the asian equity session. plenty of red around but the nikkei, s.e. t. managing to hang on to modest gains. let's get out to li. over to you. >> thanks, becky. most asian bourses closed in negative territory. investors positioned themselves ahead of key economic data, jackson hole meeting. shanghai fell. the top firm reiterated stance on policy support but no action
5:05 am
has been delivered yet. brokerages and insurers took the brunt of selling. the weakness dropped hang seng lower. industrial and material companies led loss. nikkei was one bright spot. gained 0.2% ahead of key economic data later this week. olympus shares jumped 4.4% on selling off its mobile phone unit for $674 million. south korea's kospi was weighted down by that 7.5% plunge heavyweight samsung but brought gains across other suppliers. the market ended lower led by resources and financials. iron ore producers had 7.5% after the company accept ad take over offer. india's sensex lower by .4% of back over to you, becky. >> thank you very much for that. tropical storm isaac has brushed
5:06 am
past the florida keys into the eastern part of the gulf of mexico. it's expected to strengthen to a possible category 2 storm with sustained winds of more than 100 miles before making landfall on wednesday. somewhere between mississippi and louisiana. hurricane watches are in effect from new orleans to the florida panhandle. the potential exposure to property damage along the gulf coast estimated at $36 billion. oil and gas producers are shutting down operations. isaac with temporarily shut 85% of u.s. offshore oil production, 68% of natural gas output and affect 40% of refining capacity. clearly this is having an impact on the commodity markets particularly on gasoline which is up by 4%, gains of almost 1.5% for natural gas and crude is up over 1%. we'll get the latest on where isaac is tracking in the gulf of mexico and where it make landfall from the weather
5:07 am
channel coming up in 15 minutes. and scott cohen is live from the gulf coast within the hour. so tropical storm isaac will miss south florida. heavy rains and winds from outer bands causing problems in tampa which is the site of the republican gop. they will nominate mitt romney for their candidate. the convention will be convened this afternoon but will then go on recess until tuesday. so joining us now on the phone from tampa, tony fratto. thanks for coming. a quick word how much disruption should we expect. it business as usual when thing do get up or does it took tricky? >> i had a very good conversation with the convention program organizer last night. they have been able to tighten up the schedule fairly well.
5:08 am
obviously, there will be a difference to people at home what they see on tv but still a lot of activity even though the convention will just be formally open. it's probably just as well. hard to get around very much in tampa today. a lot of rain, everyone is very focused on what the impact of the storm will be on populations and the businesses hit to the gulf. >> you managed to get the business, the necessary business done. so tony give us a view then on what kind of, the flash points or the big ticket events will be, at the convention in the next few days? >> the big opportunity for governor romney, of course, is to have, you know, two or three days, three days of supporters and prominent republicans
5:09 am
standing up and speaking positively about the republican nominee. you think of the biggest vulnerability for the republican challenger, question of connected well with the american people or not. the country is fairly split on economic policy, a lot of polling showed most americans agree with governor romney's views on the economy and they trust him to hand tell economy but there's this question of whether he's connected with the people. and so that's the opportunity that is had at the convention. he'll have that opportunity. the biggest opportunity is his acceptance speech on thursday night and he needs to do very well in that speech. >> you know, doing a great job of connecting with his own people. i noticed that the former florida republican governor charlie crist has come out and
5:10 am
publicly endorsed obama for re-election on the other side of the table so to speak. how serious is that? >> like most of these things there's a lot of history behind that and part of that has to do with, you know, the former florida governor crist politics going back as far as 2008 as well. he's never been a very well trusted and respected republican, and so there's always some sort of history behind those kinds of things. i think out of the republican primary there was, governor romney running against six, seven, eight other republicans who were spending a lot of time as we all know following it, at one time criticizing each other and that's not what you're going to see this week. you know, i think former governor crist will be a very
5:11 am
lonely republican from across the ideological spectrum rally behind romney and that's what he needs right now is to solidify that base and create energy coming out of the convention. >> just want to show viewers, i know you're on the phone, i want to show you the viewers a cartoon that's compared in the economist over the weekend. really poking fun at the republican party's divided loyalties. you see the establishment's reluctance to get behind romney during the primary season and poking fun at whether or not the mass in the party are still behind him and the role that ryan plays in trying to harness their loyalties, i guess. tony, what's the feeling there, do you think, over the razzmatazz that romney is the mand and the debate going on
5:12 am
previously how many people didn't want him even within the party not be their man. >> my experience with republican primaries and presidential races, you know, goes back, you know, 1988 or so and looking at both republican and democratic presidential campaigns is you see a lot of that leading up to the convention. that's not at all unusual unless you have a sitting incumbent president running for re-election. even then sometimes you see some challenges, the first president bush was challenged, president carter was challenged, those are the exceptions. you always have this when you have the challenger. people forget even president obama, his convention back in 2008 where a large part of the democratic electorate still even
5:13 am
at that time preferred hillary clinton as their party's nominee. there were questions as to whether candidate obama would be able to solidify the party. they tend to be able to do that coming out of the conventions. there is a real opportunity for the incumbent nominee to get that solidified case because they see the opportunity before them. >> tony, thank you very much for that. good luck with the next few days. so samsung shares tushle after a major defeat to apple in the u.s. court. our next guest said there's reasons to be bullish on the korean tech giant. find out why after this break. a passionate belief, and the foundation on which merrill lynch has been built. today, our financial advisors lead from a new position of strength.
5:14 am
together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch. [ male announcer ] it's a golden opportunity to experience the ultimate expression of power... control. [ engine revs ] during the golden opportunity sales event, get great values on some of our newest models. this is the pursuit of perfection.
5:15 am
5:16 am
these are your headlines. tropical storm isaac expected to strengthen as it heads straight for key oil refineries along the gulf coast. samsung tumbles after being found of infringing on six of seven apple patent. germany's key business sentiment index falls more than expected to reach its lowest levels since march 2010.
5:17 am
samsung electronics took its biggest daily beating in the stock market in nearly four years with $12 billion of its market cap wiped out after a u.s. court found it guilty of inspringing on six of seven apple's patents. zte corps shares fared worse. mark newman joins us now. give us your initial thoughts then on what this, what the result of this piece of litigation means in the immediate term for samsung. we've seen the shares falling hard. does that mean we should be pessimistic about the outlook for this company? >> well, clearly the outcome of
5:18 am
the san jose courts was a clear victory, unambiguous victory for apple. they won over a billion dollar settlement from samsung. more importantly, their september 20th hearing looming over samsung now which is when the judge is going decide which products are going to have a ban on them. so the injunction hearing will be september 20th. and so based on that, that's a big shock factor from investors which forced the shares to tumble somewhat expectedly, but, you know, if you look at what the impact should be, you know, we look at the impact and we size potential scenarios and the majority of it shows it will be single digit impact. 6% impact on eps for 2013. so based on that the stock tumble is somewhat overdone and the stock now is trading at
5:19 am
somewhere around six times our 2013 epf projection so it's looking extremely cheap. could be a good entry point for investors, however the overhang of the september 20th hearing will be difficult. it's going to be an overhang on the stock. the stock will tread water until then. >> what does it mean for notificati innovation. will samsung and other companies find a way around it in the long term. >> that's why i think ultimately some of these things will not stick. i mean if you look at all of the devices that are infringe ad lot of old devices infringed the hardware or rectangle patent. apple has said they own the
5:20 am
rectangle shape with rounded corners and so that was infringed upon by their galaxy s and s2. as we look at the galaxy s3, samsung design that specifically to get around the apple rectangle patents. they changed the roundness of the corners so that the top side is different roundness than the bottom corners, so that gets them around that patent and so, you know, i think samsung and other android vendors are finding ways around these patents and i think ultimately some of the software patents that apple is claiming also can worked around as well. we hope most of these things should be worked around and should not be a major issue long term. but if apple keeps pushing these things such as rectangle shape patents over people then clearly that restricts the choices of certain android vendors.
5:21 am
>> mark, thanks very much for coming to join us. we still have to take another break. we'll get the latest from the weather channel in atlanta coming up next as tropical storm warning is issued for louisiana. we'll be right back with details very shortly.
5:22 am
5:23 am
5:24 am
welcome back. let's get you up to date with the latest on tropical storm isaac. some headlines coming you want from the national hurricane center in the past few minutes suggesting tropical storm is about 180 miles southwest of fort myers, florida. has maximum sustained winds of about 65 miles per hour or so and is expected to strengthen and become a hurricane in a day sore. let's get out to alex wallace from atlanta at the weather channel and find out more. so run us through what happens next. how fast are these winds expected to get, where will it make landfall? >> looking right now becky, it's going to be somewhere along the gulf coast with steady strengthening as it makes its way in that general direction, tuesday into wednesday, thursday time frame is what we're thinking here again along the gulf coast. here's the overview of it on the satellite picture. a rather large system, closer view will enhance the satellite to show you the colors where we
5:25 am
have thunderstorms trying to get going around the center of the circulation. you can see well away from the peninsula of flow is that center. still feeling the impacts. some outer rain bands really driving on through with heavy rain leading to some flooding and even in the potential with these storms moving through for tornadoes to spin up. a tornado watch is in place for the southern half of the state of florida through the morning hours. so again the question is where is it going to be heading. here's the projected path. again, this just now update ad bit from the national hurricane center and it has shift ad little bit farther to the west. that has been the trend here as of late. shifting a little farther west. you can see who is implicated here, city of new orleans may be impacted with this thing as we work our way into the early part of wednesday. you can see gradual strengthening later on today, approaching hurricane status and getting to that point by tuesday and early part of the day category 1 hurricane and strengthening a little bit more up to about 90 mile-per-hour
5:26 am
winds by wednesday, early morning hours and moving knowledge. flood threat is what we have to watch for. following it very closely along the gulf coast. >> alex wallace updating us from the weather channel. quick check again on the u.s. futures, we're expecting a few points at the start of trade, the s&p implied open is just about five points up for the dow and nasdaq implied open there saw an increase of eight points. european markets remember no trade here in london today, push holiday. but we're looking at markets down by about .4% for the cac. the ibex, again, taking a dip since we last looked down nearly by 1% and dax holding up
5:27 am
relatively well but trading .2%. no economic data today. on tuesday we'll get the schiller home price index and consumer confidence. wednesday revised q2 gdp, pending home sales and the fed beig ebook and thursday will bring jobless claims and personal spending and we'll wrap up the week with chicago pmi, consumer sentiment and of course fed chairman ben bernanke's speech at jackson hole. we have a quick brea we'll be live in tampa to bring you more on the upcoming republican convention and we'll find out how a different kind of storm can hit tiffany's latest results. we'll be back after the break, don't go away.
5:28 am
5:29 am
5:30 am
hello and welcome to today's edition of worldwide exchange." . if you're just joining us i'm becky meehan. these are your headlines from around the world. . tropical storm isaac closing in on florida's gulf coast, set to be a major hurricane when it makes landfall by mid-week. forges all platforms to shut down and sending energy prices higher. samsung electronics shares rocked by friday's u.s. court ruling, shaving $12 billion from its market cap after the tech giant is found guilty ever infringing six of seven apple patents. germany's sentiment index
5:31 am
fell to its lowest level since march of 2010 despite hopes from manufacturing. so if you're just tuning in, thanks very much for joining the show. here how the markets are faring ahead. we're expecting a few points on the main indexes. fairly muted start to europe trading. quick check on the ftse global 300 which is down by 1.1%, close to the lows of the session. european markets started off looking not too bad but deteriorated as the day has gone to on. the dax which has held up is down by 1%. the ibex down by 1%.
5:32 am
smi trading lower by .3%. tiffany's, year-to-date is down by 11%. has covered some ground since the middle of summer. new york's iconic jewelry store tiffany will give a glimpse to luxury when it reports its earnings later today. courtney regan filed this report. >> reporter: do all good things come in small package? the iconic jewelry retailer has struggled as of late missing analyst's estimates last quarter. so while tiffany is an international retailer last quarter's 4% drop in sales at it's new york city flagship location had lower tourist domestic spending as well as softness in europe and china. analysts are expecting earnings of seven cents per share. tiffany shares are down 12% but for the reporting quarter
5:33 am
relatively flat. when do those earnings come out? wall street needs to read between the lines of financials and commentary to determine if tiffany earnings are indicative of any broader trends for high end consumers or whether it's all inside that little blue box. joining me now is president of sw retail advisors and a cnbc contributor. the flagship store in new york i guess is what it's all about when people think about tiffany, they think about that store. why are they having such a bad time trying to keep sales going there? it would seem like a prime retail environment. >> it seems like it but the last quarter they told us actually the u.s. consumer is very weak. everybody is expecting bad news from europe and china but it was the u.s. consumer that disappointed. that flagship store is 10% of overall steals. it's very important. the local customer was not spending. luckily the asian tourist consumer was coming in and spending.
5:34 am
that offset some of the european tourism weakness. this quarter is question is, is that asian tourism still holding up as we see numbers out of china start to come down. >> how does the spending by asian tourists in the new york store, how does that compare to spending within asia? >> well, i think as, especially the chinese, they tend to spend more overseas because it's a lot less expensive. they pay about a 30%, 40% premium in mainland china for chinese products. what eve seen inside china in mainland is tier one cities like bejing are decelerating. retail numbers coming in for the last four consecutive months. they are still spending overseas but if we're hearing bad news on nameland one can guess the next one to fall is the tourism
5:35 am
spent. >> to an extent is some of this discretionary spending to what extent is it being pent up and ready to come back with a vengeance if we get a more optimism or even just clarity about what's going on in the global economy or is it gone for good? >> i think that's very crucial to tiffany's core customer because they tend to pull back when their market gyrations. so stores that are near the financial community like the london city store or the new york flagship store they really see spending come in when the market fluctuates. that's important here. i also think if you look at the comparison, this quarter last quarter, extremely difficult in the u.s. and against numbers in asia. tiffany is talking about a q4 recovery because comparisons get easier so they are talking q4 is the only quarter this year that they will see growth. >> how does tiffany stack up to its nearest rivals as well when
5:36 am
it comes to attracting this kind of spending. most analysts rates tiffany a buy but not some as some of its peers to indicate there's a bit of a weakness. >> last quarter they took down earnings significantly about 20 cents. so that took in expectations, you know. you see other competitors, you can point to another one that gets 40% from europe. they are getting that chinese tourism spent where as tiffany's exposure is 10%. a lot of the luxury brand, we heard mixed news from, products doing okay in the states. coach last quarter had some issues. so you're seeing mixed numbers come out of luxury. >> what should we expect from the stock then through these numbers and we just showed the long term year-to-date down by 11 to 12%.
5:37 am
>> expectations are low but, again, if you really don't see any sort of recovery in the u.s. consumer, and then we hear another pull back in europe and even potentially that tourism from china, the spend is coming down in the flagship new york store that could send the stock back to the mid-50s here, you know, and certainly present an opportunity and again the expectations are, low the company had said that all the growth will come in q4. >> thanks so much for coming in. we'll count the numbers later on. moving on to a different topic, we have an auction of german debt, 12 month debt auctioned off in germany. average yield has fallen further. the average yield here coming in at 0.0246. any yield at all compared to a similar auction on july 23rd. that was 0.4%.
5:38 am
they have sold 1.975 billion euros of 12 month debt across germany, the bid to cover ratio is at two. dropping from the july 23rd and it was 2.3. very, very low yields on that debt. still to come the republicans have to wait a day to get their party story. tropical storm isaac gets in the way of their convention in tampa. we're live in south florida with more next. at merrill lynch, we understand the importance of your goals. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life. that's the power of the right advisor. that's merrill lynch.
5:39 am
5:40 am
5:41 am
you're watching "worldwide exchange". these are your headlines. tropical storm isaac expected to become a hurricane as it approaches the florida coast. it's 180 miles from fort myers. samsung electronic shares take a tumble after the tech giant is found guilty of infringing six of seven apple patents. german's key economic index weakens and falls to its lowest level since march of 2010. tropical storm isaac will miss most of south florida. heavy rains and winds causing problems in tampa which is the site of the republican national convention. gop will formally nominate mitt romney as its presidential
5:42 am
candidate. the convention will be formally convened this afternoon and then go into recess until tuesday. joining us is john harwood. what kind of impact should he anticipate. at it day's delay, things will go as normal after that or do we expect a pull back? >> certainly hoping i want goes as formal, becky after the one day delay. really these conventions have become so scripted and the american people have become so accustomed to politics it doesn't matter much to lose one day of the convention. most important speech is mitt romney's speech on thursday night, his chance to talk to millions of americans who haven't seen him talk at length the way he'll have a chance to do. what republicans are most concerned about is tuesday and wednesday, when the storm hits in the gulf, perhaps in new orleans is whether or not the storm has such an impact and produces scenes of devastation that produce a contrast they don't want between celebrating republicans here in tampa and
5:43 am
suffering of their fellow americans. so, they are praying for the mildest possible hurricane even though we already know it's not going hit tampa very hard they don't want to it hit hard in the gulf because it will make them more difficult to communicate. >> john, let's get to the main business, mitt romney is the man that's been selected. there has been, i guess we could say a fair amount of controversy around him. will the rank-and-file finally unite behind him, rally around romney as we go into the election. >> yes, they will. mitt romney has done a pretty good job of uniting the republican base. his selection of paul ryan, a very conservative chairman of the house budget committee has helped do that, republicans are enthused about that choice. what he has to do between now and election day is both reach a fairly small number of independents who don't like either candidate. they don't like president obama, they don't like mitt romney, get enough of those to win and also make sure the turnout among
5:44 am
their base is sufficient to match what the democrats are going to do. mitt romney is a couple of points behind in the national polls. within striking distance of president obama. he has to get over that last couple of points. >> john, thank you very much. john harwood, cnbc chief washington correspondent there. let me bring you up to date from lonmin. we have been reporting in recent days about the sentences at one of lonmin's mines in south africa and platinum mine in south africa in which 44 people were killed. lonmin says that violence has been spreading to eastern operations as well. this is according to reports just in the past few moments. that violence is spreading to eastern provinces in south africa. also there has been a drop in the number of miners turning out network at that americana plant, mine where the initial violence took place. it's dropped to 13%. this is what lonmin told in the past few minutes.
5:45 am
according to their statement 13% average attendance across all their shifts at work this morning. employees are waiting for it to be safe before they return to work out of some concern around the security situation at lonmin's plants. there have been incidents of intimidation towards bus drivers overnight as well as that violence spread to some of the eastern parts of the company's operations, management lonmin appealing to all stakeholders to remain calm is what they are saying. the company is committed to, continue to communicate with their employees and bring restlougs this issue but having a big impact and having a bigger impact as that violence is continuing to spread around lonmin's plants. we'll take a quick break. still to come with tropical storm isaac closing in on u.s. oil refineries, find out how traders are making their own
5:46 am
preparations.
5:47 am
5:48 am
so the european markets then have taken bit of a turn for the worse since we've been on air here. the dax is down .2%. ibex losing a little bit of ground. u.s. markets will open later today to be a little higher, a few points across the board. now samsung is one of the stocks we've been looking at today because this stock has fallen hard, down by 7.5% in fact. the south korean tech giant took a beating in the stock market with $12 billion of its market cap wiped out after a u.s. court found it guilty of infringing six of apple's patents. samsung not the only tech company getting punished. apple's victory is a
5:49 am
anythingtive for android tech makers. htc is down 1.9%. concerns i want may settle its own patent lawsuits against the u.s. tech company. we're getting some tweets on the samsung ruling. a tweet says don't think the ruling was fair, apple bullying its competitors. samsung will bounce back. andrew says stock price reaction shows a lot is at stake regarding the profit jacket of each company. potentially the consumer will lose out. if you want to join the conversation here on "worldwide exchange," get in touch with us. e-mail at worldwide@cnbc.com or go to twitter at cnbcwex.com. or you can fine me directly @beckymeehan. let me know what you think about the issues we're discussing today. so tropical storm isaac is moving into the eastern part of the gulf of mexico today. it's expected to strengthen to a
5:50 am
possible category 2 storm before making landfall wednesday. somewhere between mississippi and louisiana. hurricane watches are in effect from new orleans to the florida panhandle. cnbc senior correspondent scott cohen joins us now from the gulf shores of alabama. so, what kind of level of preparations, scott, are under way for people in that part of the world right now? >> reporter: well, they are definitely is quite a bit of preparation under way. the difficulty with this storm over the weekend has been that the last lot of uncertainty and still is about where on the gulf coast it will hit and so hurricane warnings went up yesterday from all the way from panhandle to west of new orleans. really all of the northern gulf coast. and so we've seen here in gulf shores, alabama, which is near mobile, alabama, a lot of preparations in terms of people going to stores to stock up on things like plywood and different supplies, lines at the gas stations over in new orleans
5:51 am
which moved into the storm's cross-hairs so to speak over the last 24 hours or so there are now gas lines there as people begin stocking up for the possibility of a hurricane hitting probably in the next 24, 48 hours, at least the outer bands of all of this. and the question is how strong is it going to be? the latest forecast has it come ago shore as a category 1. that's good news in terms of life and property. >> let's talk as well about the more corporate impact on oil, natural gas and the various routes around that region too. how much impact should we expect the short fallout from this storm as we discussed earlier on the show already reflected in commodity prices today? >> reporter: right. it's not just corporate impact but economic bacteria with oil prices elevated. they evacuate these offshore oil rigs and platforms ahead of the
5:52 am
storm and further west this storm tracks the more of an issue it is so we've seen evacuations really beginning over the weekend and before that from some of the platforms. those are now accelerating. as the storm goes further west then you start looking at the potential of disruptions in refineries which is the last thing that the market needs with the refinery explosion already in venezuela, fire in california, big portion of gulf coast u.s. refining i should say takes place along the gulf coast and most of those refineries are located from basically mississippi west, heavy concentration in louisiana into texas. so between the rigs offshore and refineries on shore they are watching this very carefully. the good news is it hasn't strengthened dwroet a hurricane and may on labor category 1 when it comes ashore. they can probably take that in stride but doesn't do anything about the early disruptions in anticipation. >> fingers crossed that everything goes okay and people
5:53 am
stay safe. thanks very much. scott cohen, cnbc senior correspondent. so, let's give you a check on what sells on theened this week in the u.s. no economic data today but on tuesday we'll get the case-shiller and consumer confident. wednesday, gdp pending home sales and fed beig ebook. thursday brings weekly jobless claims and personal income. and friday chicago pmi and consumer sentiment and bernanke's jackson hole speech. ben, i guess we've been waiting for a while to hear what bernanke has to say at jackson hole. is that the main item on the agenda this week from your perspective? >> yeah. it appears to be. you covered for the most part, we have some smaller numbers coming out. with that the market is sort of in a holding pattern again and that's typically been the case, at least for the month of
5:54 am
august. seeing very low volatility, low energy type trade but recently there's been a lot of conviction swoeshd the trade. you look at the euro currency nice move above the 121 handle. sustained trade to 125 handle. bond have come off from those upper levels as well. a couple of major markets that are vertical activity. we're seeing market movement. just amidst very low volatility, low energy type trade but fairly typical for the month of august so again right now we're waiting for some more news. >> the fed as we're all looking very closely at the various bits of u.s. economic data to build a picture of how weak or strong the recovery picture is in the states, jobless claims for instance later this week. what's your impression over how convincing the u.s. recovery is and if we're in line for possibility of more qe, looking for a bit of weakness to get
5:55 am
extra stimulus that people are talking about. >> yeah. well i think right now the fed is in a very difficult position at this point. the numbers we're seeing for the most part have been mixed. i'm seeing lackluster retail sales numbers, the jobs data is not there where we would like to see. the growth data as well is somewhat lagging. for the most part we're not seeing, you know, kind of an all out off the cliff kind of if you will fall off. the numbers right there for the most part are a little bit disappointing. as much as i think the fed can act at this point i don't think we'll see anything on behalf of the fed. if you look at the dollar that's the reflection or indication that the dollar is giving right now. at least as long as it's holding above this 81 even level. i think it seems that the investor sentiment right now isn't there. again we were looking at a couple of fed meetings ago. there was a little bit higher chance.
5:56 am
i i had the optimism on behalf of the stimulus thrill seekers if you will was there and it just isn't right now. so, again, i think the markets are in a holding pattern. waiting for more economic data. >> tell me, ben, where the, six week winning streak last week. are we at the end of the summer rally? >> well, i'm not sure. if you look at friday's activity i would have to say we had some strong rejection of the trade below 1400 in the s&ps. we touched below there in the early morning session and basically rejected that lower level. i think you have to look again right now 1425 in the s&ps. >> great. ben thank you very much for that. that's it for today's show. i'm becky meehan. thank you for watching "worldwide exchange". watch adam posen tomorrow at 11:00 a.m. cet.
5:57 am
[ male announcer ] the perfect photo... [ man ] nice! [ male announcer ] isn't always the one you plan to take. whoa, check it out. hey baby goat... no that's not yours... [ hikers whispering ] ...that's not yours. [ goat bleats ] na, na, na -- no! [ male announcer ] now you can take a photo right from video, so you'll never miss the perfect shot. [ hikers laughing, commenting ] at&t introduces the htc one x. now $99.99. rethink possible.
5:58 am
5:59 am
good morning. today's top stories, hurricane warnings for the gulf coast. isaac marching towards the energy rich area. this was supposed to be mitt romney's big week but the storm is foorgs shuffle of the schedule at the republican convention in tampa. in corporate news a major win for apple the iphone maker claiming a sweeping patent victory over smartphone rival samsung. both stocks responding. it's monday, august 27, 2012. "squawk box" begins right now. good morning, everybody. welcome to

160 Views

info Stream Only

Uploaded by TV Archive on